I shorted rune about a week ago, it went bad, I got liquidated after about 24 hours.
I could have taken a much lower loss within 12 hours of watching it reject a specific price range multiple times but you know the usual conviction problem and willingness to get liquidated than cut the losses.
Yes, that was me last week.
But why would I short rune when I've personally talked about “how great it is?”
Well, first off, taking a short position is not always an indicator of not trusting in an asset’s long term performance being positive. Most short sellers are temporary gamblers, like myself, looking to profit from perceived “fear in the markets” and you can bet your great great granny's ashes that every damn time that happens, market makers always seek to run a shortsqueeze.
That happened last week, the reverse pump that got me liquidated was not some organic rebounce. The community sentiment was too damn low for the asset to not fall further and frankly speaking, not even protocol stats was in support of a pump.
My guess is that literally anyone from insiders to maybe random market makers was just happy to fuck us over. I should have opened a second short after the short squeeze, it was literally the no-brainer move because rune bears immediately began preaching how they've now “bought the dip” and will be riding it up above $3.
That's some classic bullshit, a literal sell the news opportunity starring me right in the face, but I guess I was too chicken to do that.
RUNE’s Deterministic Value
I still think Thorchain built something unique here. It was easy to miss the devil in the details when it comes to its lending side of the protocol. To most people's defence, it's not something you can easily spot unless you went looking for it.
But as weird as everything has been recently, nothing is more weird than the community literally not seeing how Thorchain’s documentation and design revealed that RUNE was overvalued at that point.
Now, this is the real reason I shorted rune. Just to clarify, the image above, obviously a price alert from Binance, is the target price I had set to take profit in my short position. I never cleared it out after being liquidated, so I got notified yesterday and simply giggled because I was right to believe it will fall below $1.65. I just made an entry hastily and paid for it even with low leverage.
Now, what is RUNE’s deterministic value?
In my last “bull post” on Thorchain, I pointed out why I believed RUNE could go as high as $50 and what indicators can be used to determine if the asset was ever over bought or sold.
This was on Jan. 6. And RUNE traded between $4-5 and if you opened a short right after I hit publish, you would probably be richer than most pump fun traders, cause just maybe, I'm the Jim Cramer of Hive.
Anyways, RUNE’s deterministic value is some sort of fundamental “fair value” of RUNE that considers Thorchain’s TVL of non-RUNE assets as an indicator for what the native asset should be valued at, in fairness, considering that crypto is generally considered 3x overvalued due to the nature of inflows creating 2x to 6x effects on assets market capitalization.
At the time that article was published, RUNE’s deterministic value was at $1.79, 3x lower than it's market price.
The problem here was that Thorchain’s lending side of the equation was not factored in with all of this, otherwise, I would have personally shorted RUNE then and that would have been a bear post.
Reasons being that Thorchain’s liabilities was too high compared to its TVL. When I looked over the data as Thorchain was reported to be insolvent, it was immediately clear that RUNE was overvalued and was inevitably going to keep falling until it broke that fair value which was $1.79, burdened by its debt.
I honestly do not want to be the bearer of bad news but RUNE, as an asset still seems overvalued as TVL has dropped to $231 million per Defillama.com and RUNE makes up approximately 56% of that, effectively making it's debt greater than the Protocol’s TVL.
Unless am missing some important details here, Thorchain, which is a pretty great DApp, is in big trouble here and it will take more than preaching about it's $35 million yearly revenue on X to build trust because if the revenue was so good, why the $200 million debt?
Thorchain leaned heavily on the speculation that RUNE will always outperform Bitcoin and that didn't happen and now the entire protocol and community has to pay for that expensive economic mistake.
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